Summary
Morgan Stanley's (MS) third quarter 2009 results reflect a significant rebound in market activity compared to the previous year, although the company experienced substantial losses related to its own credit spread on borrowings. Net revenues for the quarter were $8.675 billion, a decrease from $18.011 billion in the prior year's quarter, largely impacted by negative credit spread movements on the company's own debt, which resulted in losses of $0.9 billion compared to gains of $9.7 billion in Q3 2008. However, the Institutional Securities segment showed resilience in investment banking, with underwriting revenues up 74%, though trading revenues declined significantly across equity and fixed income. The Global Wealth Management Group saw a substantial boost in net revenues (up 91%) driven by the consolidation of Morgan Stanley Smith Barney (MSSB), which closed in May 2009. Despite these challenges, the company's capital ratios remained strong, with Tier 1 capital to risk-weighted assets at 15.4%, indicating a solid capital base.
Financial Highlights
43 data points| Revenue | $8.47B |
| Operating Income | $814.00M |
| Interest Expense | $1.35B |
| Net Income | $757.00M |
| EPS (Basic) | $0.39 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 1.29B |
| Shares Outstanding (Diluted) | 1.30B |
Key Highlights
- 1Morgan Stanley reported a net income of $757 million for the quarter, a sharp decrease from $8.151 billion in the same period last year, heavily influenced by a $0.9 billion loss related to tightening credit spreads on its own borrowings.
- 2Net revenues declined significantly to $8.675 billion from $18.011 billion year-over-year, primarily due to the aforementioned credit spread impact and lower trading volumes.
- 3The Global Wealth Management Group's net revenues more than doubled to $3.029 billion, largely due to the consolidation of Morgan Stanley Smith Barney (MSSB) effective May 31, 2009.
- 4Institutional Securities segment's net revenues dropped to $4.974 billion from $16.043 billion, primarily due to large gains in the prior year from widening credit spreads on borrowings, which were offset by losses in the current quarter.
- 5Investment banking revenues within Institutional Securities increased by 11% to $1.039 billion, with underwriting revenues showing a substantial 74% increase.
- 6Equity and fixed income trading revenues saw significant declines, reflecting lower market volumes and volatility, with equity trading down 82% and fixed income down 77% year-over-year.
- 7The company maintained strong regulatory capital ratios, with its Tier 1 capital ratio at 15.4% of risk-weighted assets, well above the regulatory minimum.